Breach of Contract
DiLorenzo sets forth two theories for his summary judgment
motion: (1) no contract was ever formed between the parties,
and (2) even if a contract was formed, Jafari breached by
failing to pay for the Painting within a reasonable time.
Jafari contends that a contract existed from the January 26,
1988 memo, and that DiLorenzo breached when he sold the
Painting to Fotouhi.
Ultimately, DiLorenzo's first theory concerns whether or not
he and Jafari intended to be bound for the sale of the Painting
sometime before DiLorenzo sold it to Fotouhi. The intent to
contract, an indispensable part of any contract claim, is
therefore in dispute under this theory. Where intention is in
dispute, summary judgment is improper. Thompson v. Gjivoje,
896 F.2d 716, 721 (2d Cir. 1990) ("[w]here contractual language is
ambiguous and subject to varying reasonable interpretations,
intent becomes an issue of fact and summary judgment is
improper"); Burger King Corp. v. Horn & Hardart Company,
893 F.2d 525, 528 (2d Cir. 1990) ("[i]f there is conflicting
extrinsic evidence regarding the parties' intent, the district
court may only identify the issues at the summary judgment
stage, not resolve them"); Curry Road Ltd. v. K Mart Corp.,
893 F.2d 509, 511 (2d Cir. 1990) (intent of parties question of
fact, and therefore, summary judgment improper).
For the purposes of this summary judgment motion only,
however, we assume that Jafari and DiLorenzo did form a
contract on January 26, 1988, when the Christie's expert
verified the Painting and the parties agreed on the purchase
price. We further assume that the memo handwritten and
initialled by DiLorenzo satisfies the Statute of Frauds
Although this contract did not specify the payment and
delivery dates, we can imply the time term into the contract.
New York's UCC 2-309(1) states in pertinent part that "[t]he
time for shipment or delivery or any other action under a
contract if not . . . agreed upon shall be a reasonable time."
Furthermore, UCC 1-204(2) provides that "a reasonable time . .
. depends on the nature, purpose and circumstances of such
action." Therefore, both Jafari and DiLorenzo were obliged by
this contract to perform, tender payment and ship the Painting,
within a reasonable time given the nature and purposes of the
contract. See Zev v. Merman, 73 N.Y.2d 781, 536 N.Y.S.2d 739,
533 N.E.2d 669 (1988).
The purposes of this contract were twofold: Jafari would
obtain the Painting he desired, and DiLorenzo expected quick
payment of the $210,000 purchase price. Thus, each party was
expected to substantially perform his obligation or face
liability to the other. "Although the issue of substantial
performance is usually one of fact, 'if the inferences are
certain, the question involves only a matter of law and is to
be decided by the court'." Anderson Clayton & Co. v. Alanthus
Corp., 91 A.D.2d 985, 457 N.Y.S.2d 578, 579 (1983) (citing 22
N.Y. Jur.2d, Contracts, § 320, pp. 198-99).
Both parties admit to knowledge of DiLorenzo's deadline to
sell the Painting. Therefore, Jafari was aware at the time the
agreement was formed that a time constraint underlay the entire
contract, and that payment was expected as soon as possible. It
is also undisputed that DiLorenzo was willing to accept a
certified check or a deposit; Jafari admits that he tendered
neither payment nor a deposit at any time before DiLorenzo sold
the Painting to Fotouhi. Finally, it is undisputed that
DiLorenzo was ready to complete the transaction at any time.
Jafari admits that he would not commit himself until he was
given the provenance. Jafari even admitted that if DiLorenzo
had appeared at the office on March 25, 1988 without the
provenance, Jafari would have proceeded only upon the advice of
his attorney. In other words, Jafari conceivably was unwilling
to tender payment as late as March 25, 1988.
The failure to tender payment is a material breach of a
contract. See Truglia v. KFC Corp., 692 F. Supp. 271, 276
(S.D.N. Y. 1988), aff'd without op., Truglia v. KFC Corp.,
875 F.2d 308 (2d Cir. 1989); see also Schneider v. Dumbarton
Developers, Inc., 767 F.2d 1007, 1014 (D.C. Cir. 1985) ("we
find that the [buyers] failed to pay the
seller any money . . . indeed it is difficult to imagine
anything more material"). Jafari did not tender payment or
deposit between January 26 and March 24, 1988. Given
DiLorenzo's known deadline, Jafari's failure to pay within this
time amounts to a material breach of the contract.
Moreover, where a party materially breaches, he has failed to
substantially perform the contract, and the other party is
discharged from performing his obligation. Ferrell v. Secretary
of Defense, 662 F.2d 1179, 1181 (5th Cir. 1981); Merritt Hill
Vineyards, Inc. v. Windy Heights Vineyard, Inc., 61 N.Y.2d 106,
460 N.E.2d 1077, 1081, 472 N.Y.S.2d 592, 596 (1984);
Restatements (Second) of Contracts § 241. Consequently, when
Jafari materially breached, DiLorenzo was no longer bound to
deliver the Painting to Jafari, and was free to sell it to
Fotouhi on March 25, 1988.
Therefore, even assuming a contract existed, it was Jafari
— not DiLorenzo — who materially breached. Therefore Jafari
cannot recover for purchasing the Painting at a higher price
Motion to Amend
Because this court finds that DiLorenzo was not bound even if
a contract existed, Jafari's motion to amend becomes moot. If
DiLorenzo were the agent for alleged-owner Batliner, then
Batliner is also released from any obligation to Jafari.
Similarly, Fotouhi could not have induced DiLorenzo to breach
the contract since DiLorenzo had been released of his
obligation by Jafari's non-performance. Therefore, Jafari's
motion to amend is denied.
For the foregoing reasons, DiLorenzo's motion for summary
judgment is granted, and Jafari's motion to amend is denied.
It is so ordered.